How they did it: Reporters uncovered Trump hush payments to two women

 
Photo illustration featuring Donald Trump and Michael Cohen
(Photo illustration: The Wall Street Journal; Photos: Zuma Press, Reuters)
By

March 11, 2019

Editor’s note: On March 12, the Shorenstein Center on Media, Politics and Public Policy will award the 2019 Goldsmith Prize for Investigative Reporting to a stellar investigative report that has had a direct impact on government, politics and policy at the national, state or local levels. Seven reporting teams have been chosen as finalists for the 2019 prize, which carries a $10,000 award for finalists and $25,000 for the winner. This year, for the first time, Journalist’s Resource is publishing a series of interviews with the finalists, in the interest of giving a behind-the-scenes explanation of the process, tools, and legwork it takes to create an important piece of investigative journalism. Journalist’s Resource is a project of the Shorenstein Center, but had no involvement with or influence on the judging process for the Goldsmith Prize finalists or winner.

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A team from The Wall Street Journal uncovered secret payoffs that Donald Trump and his associates arranged during the 2016 presidential election campaign to suppress sexual allegations from two women, including a porn star known as Stormy Daniels.

The Journal’s series of exclusive reports, most of which were published in 2018, prompted a federal investigation into campaign-finance abuses and implicated the president in a federal crime. Trump’s former personal attorney, Michael Cohen, pleaded guilty last year to a string of crimes, including violating campaign finance law by arranging large payments to two women who had alleged affairs with Trump. In late February 2019, Cohen testified before a House committee that Trump helped him coordinate the payment to Daniels.

The Journal first reported on a Trump-related payoff right before the 2016 election. On Nov. 4, 2016, journalists Joe Palazzolo, Michael Rothfeld and Lukas Alpert broke the news that the company that owns the National Enquirer, American Media Inc., agreed to give former Playboy model Karen McDougal $150,000 for her story of an extramarital affair with Trump a decade earlier. But the company, headed by a longtime friend of Trump, did not publish the story, the Journal reported.

“We didn’t know at that time the extent to which Trump was involved or Michel Cohen was involved,” Palazzolo said during a recent podcast interview with Heidi Legg, special projects director at the Shorenstein Center, which runs Journalist’s Resource.

 

 

After that first story, Rothfeld and Palazzolo worked for more than a year to investigate secret hush payments. Their next article, published in January 2018, reported on a $130,000 payment Cohen made to Daniels to keep her quiet a month before the election. Days later, Rothfeld and Palazzolo followed with another story detailing how Cohen used a shell company to make the payment to Daniels’ lawyer.

The Journal ran several more articles in 2018 that focused on Trump’s relationship with Cohen, Trump’s role in the payoffs and how Cohen turned on the president, publicly implicating him.

The series, titled “Trump’s Hush Money,” “fundamentally altered the trajectory of Mr. Trump’s presidency,” the Journal wrote in the paperwork it submitted to enter this year’s contest for the prestigious Goldsmith Prize for Investigative Reporting. The series recently was chosen as a finalist. The Journal also pointed out that once Cohen turned state’s evidence against the president, Cohen began cooperating with special counsel Robert Mueller’s ongoing investigation into Russian election tampering.

To learn more about the series and how it was reported, Journalist Resource reached out to several reporters who had worked on it. In an interview by e-mail, Palazzolo spoke to us about how the team tracked down key details and handled tricky questions such as whether to rely on anonymous sources. He also offered tips for journalists interested in doing investigative reporting at a national level.

Below are our six questions and Palazzolo’s answers. We made a few minor edits for clarity or to accommodate Journalist’s Resource’s editorial style.

 

Denise Ordway, Journalist’s Resource: How did you find the shell company that Mr. Cohen used to make the hush payment to Stormy Daniels? And what steps did you take to confirm the information before publishing it?

Joe Palazzolo: “We learned from a source that Michael Cohen used a shell company, but our source didn’t know the exact name. The source said it was something obvious, like ‘Damage Control LLC.’ We didn’t know where the company was incorporated. We had a general sense of when Cohen paid Daniels. Michael Rothfeld began requesting records from state agencies of all companies formed in September and October of 2016. We suspected Delaware, given its reputation for corporate secrecy and proximity to New York.

Delaware’s Division of Corporations produced a report for us with thousands of LLCs [Limited Liability Companies]. We also got records from Nevada and Wyoming. We pored over them for likely candidates. Another source suggested we try looking for a company with ‘Resolution’ in the name.

Presently, we found a Delaware company called Resolution Consultants LLC. Delaware’s online database offers scant information about corporations, except the incorporation service used and the date or formation. But you can request the formation documents from the Division of Corporations. We did, and sure enough, there was Michael Cohen, listed as the company’s “Authorized Person.” We then called the incorporation service Cohen used to confirm he was the right Michael Cohen. They had Cohen’s New York address on file.

But Resolution Consultants LLC was formed on Sept. 30 and dissolved on Oct. 17, before the payment to Daniels, according to our sources. We figured Cohen had made an error in setting up the company or needed to change the company’s name for whatever reason. So we went to the spreadsheet of companies formed in Delaware that we’d created and narrowed our search to corporations that were created on Oct. 17, the same day Resolution Consultants was dissolved.

Michael, myself and our editors, Mike Siconolfi and Ashby Jones, picked through the records, hundreds of them, for likely candidates. We all made lists. One company had struck all four of us as a possible match: Essential Consultants LLC. The next morning, we pulled the formation documents, and Michael Cohen’s name was on them. It took us another couple of days to confirm with our sources that Cohen used Essential for the payment.”

Journalist’s Resource: It’s no secret that a lot of the public does not trust the news media. Can you please talk about the reasons you decided to rely on anonymous sources for this investigative series and whether you think it’s a good practice for journalists, generally speaking?

Palazzolo: “We were reporting on a contract that, by its nature, legally bound the parties involved to secrecy. And the president has a history of filing lawsuits that can cost defendants a fortune in legal fees, even if they are ultimately thrown out. We couldn’t have got this information to the public without granting our sources anonymity. But that’s not true for all our stories. We all need to push harder to get sources on the record.”

Journalist’s Resource: You wrote in your award submission paperwork that the most rewarding element of this investigation is how organic it has been. Can you elaborate, please? Can you also talk about how “organic” news investigations differ from other kinds — for example, a planned series?

Palazzolo: “It was like building a house from the ground up. We had no idea where our reporting would take us when we started making calls in October 2016, after receiving a tip about a lawyer entering into secret settlements to hide Trump’s past. We had to develop sources in world of adult entertainers, gossip brokers, lawyers who help clients profit from dirt on celebrities and lawyers who help celebrities keep their secrets under wraps.

When we discovered that a woman named Karen McDougal had been paid by the National Enquirer to keep quiet about an alleged affair with Trump, we published a story four days before the election, noting that the CEO of the Enquirer’s parent company, American Media, was a friend of Trump and an unabashed supporter of his presidential campaign. We also reported in that story that McDougal’s lawyer, Keith Davidson, represented another woman reported to have had an affair with Trump — Stormy Daniels, who like McDougal had been in talks with ABC before the election and abruptly cut them off.

We spent the next year trying to figure out whether Daniels or other women were paid off, and if so, whether Trump knew about the hush payments. Our reporting built little by little to our January 2018 story revealing Cohen’s payment to Daniels.

Organic doesn’t mean haphazard. We planned each step, strategized the best ways of getting the information, sussed out the motivations of our sources.”

Journalist’s Resource: What skills or expertise do the members of this investigative team have that made them uniquely qualified to work on this project? Can you talk about the process used to decide which journalists would work together on this project?

Palazzolo: “I work in the Journal‘s legal group and have experience rummaging through court documents and other public records. My editor reached out to the investigative team for help. Michael Rothfeld and I had worked together previously and our skills were complementary. He also has a deep knowledge of public records and is one of the most talented interviewers I’ve ever had the pleasure of working with. Lukas Alpert, from our media team, was well acquainted with the tabloid world. His sources and knowledge were invaluable. At the Journal, teams typically come together based on need.”

Journalist’s Resource: Can you please share a couple of examples of techniques you used to get a reluctant source to speak to you or share information they had with you?

Palazzolo: “The key is finding what would motivate someone to speak to you. Maybe they have an interest in making sure they have a say in how they are portrayed in your story, or they want to protect someone else, or deflect attention from themselves, or they believe — like you do — that the story you’re working on is in the public interest.

Be honest about what you know and what you don’t know, and build trust with them by doing right by them. That doesn’t mean going soft on sources. It means that you let them know exactly what you intend to say about them in print, that you hear them out and that you treat them fairly.”

Journalist’s Resource: If you were talking to an entry-level reporter who hopes to someday do investigative work on national leaders such as the president, what are three or four tips you’d give that person?

Palazzolo: “1) Make the extra call. You may think that a given person will never speak with you, why bother calling him or her? Don’t think that way. Call people, call everyone. Our source lists for these stories have close to a thousand names. Pick up the phone.

2) All the phone work can be tedious. If you suspect someone has information that’s important to your story, meet them in person. You will always get more.

3) Familiarize yourself with as many categories of public records as you can: regulatory filings, court documents, property records, loan records, corporate records. Mine them for potential sources.

4) Stay organized. Big, sprawling stories have lots of dots that need to be connected. Keep your sources files updated. Note the last time you spoke with them and what happened. Make searchable databases for your public records. The more organized you are, the more you’ll be able to connect the dots and see the big picture.”

 

Interested in the other Goldsmith Prize finalists? Read about how public records helped reporters investigate police abuse of power in Indiana and problems with Texas’ Medicaid system and how language skills and cultural competency helped journalists investigate teen labor trafficking in Ohio.

 

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